MNI BRIEF: BOE Pill Backs Measured, Not Aggressive, Tightening

Bank of England Monetary Policy Comittee member Huw Pill made the case for raising Bank Rate in 25-basis-point steps, rather than larger hikes, in a speech on Wednesday, arguing it would show a "measured" approach to policy.

"Reestablishing a reputation for measured and purposeful steps in policy is valuable," Pill told the Society of Professional Economists, explaining his vote for February’s 25-basis-point increase, and adding that such a scale of hike "with the prospect of more to come in the coming months" was a way of "containing market expectations of aggressive activism".

Rather than categorising policymakers as hawks or doves, which Pill argued makes little sense given that they share the same inflation target, he said they should be graded according to where they sit on the activist spectrum, in terms of how aggressively they would tackle inflationary pressure. In Feb, the MPC split five to four in favour of the 25bps hike, with four members backing a 50 bps increase.